Telstra’s largest ever customer contract is proving to be its most back-breaking, as the telco falls dramatically behind schedule in its $1 billion replacement of the Department of Defence’s fixed telecommunications network.

iTnews can reveal that the terrestrial communications project outsourced to Telstra is in serious strife.

While the telco has admitted there have been “some delays on the transformation schedule”, it insisted “a project of this scale and complexity will always present challenges both in its implementation and delivery”.

But insiders speaking to iTnews on the condition of anonymity say that just three months out from the planned finish line for the program, Telstra is yet to achieve one of its first critical milestones: an interim operating capability (IOC) or proof-of-concept prototype of its proposed network design.

In fact, the IOC is now somewhere in the vicinity of two years late, sources said.